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Excellent video and overview of the 3 covered call ETF's..... Very well done and a thorough explanation of each's positives and negatives. Thanks for your hard work and presentation of the video. I shall subscribe.... Be well and have a great Thanksgiving and holiday week.
I'm part of the fire movement and retired in mid 40s. I hold 30% JEPI, 30% JEPQ and 40% SCHD. I drip any dividends not spent at the end of each month and will more than likely never change a thing.
I don't know what that is but congrats! Depending on what percentage of the income you're reinvesting and the future returns of US equities you may not have to change a thing. But... you might. Best of luck!
@FundamentalsofFinance Don't know what what is, I'm assuming you mean the fire movement? It's people that invest aggressively while they are young and then once stay obtain enough growth they move everything into dividend paying ETFs and cover call options that generate enough income where they can retire early. If you're going to go that route, you want a hefty enough amount leftover each month where after paying your bills you can always drip, meaning purchasing more of the funds that are paying you, this way you are always getting a raise.
What about the 97% ROC of SPYI? That’s high. They claim on their website that they won’t be subject to NAV erosion due to appreciation. Granted, their NAV has been pretty stable so far but 97% is ROC? What am I missing? Great video btw :)
I am attempting to steer away from covered call ETF's however I do have a position in GPIX and must say that I am pretty happy with it as it has a pretty reasonable expense ratio and good dividend without destroying your NAV. GPIX is definitely my pick between the three.
I feel dumb. I still don’t understand why SPYI isn’t a good investment? Would they have to cut their dividend in a down market? If not, isn’t that “downside protection?” Or are you saying that the dividend “yield” does go down as the price goes down, unlike a single company stock?
Is there any place for cover call products in your view? Could an investor wisely sink a portion of an account to earn cash monthly while investing a large majority in growth assets that are untouched to compound?
The short answer is yes, but the caveat is that I fear this current craze with them is going to end very badly for a lot of people. As part of a retirement income portfolio they can make sense when paired with other things that offer more upside potential. Or, they can make sense as a lower-risk equity position if all of the dividends are reinvested. But, the idea that you can take out an 8+% yield every year and maintain the value of your investment is a pipe dream. The ones with weekly distributions or super aggressive underlying stock exposure (like tsly and cony) are absolute recipes for disaster in my opinion. So, yes, for what you're describing the more prudently managed ones (like any of these in this video) can make sense. But unfortunately I fear that many people are not using them wisely like that. If you're young, you can afford to make those mistakes and learn the hard way. If you're a retiree, it might be really hard to come back from a 30+% loss so that's what I really worry about with a lot of covered call ETFs.
I invest an unsecured line of credit into MSTY, QDTE, SPYI, XDTE. I paid off the loan in 7 months. The dividends fund have now been paid off and nothing out of my pocket. These funds have been great to build up a dividend slice of my portfolio.
I would avoid. There are plenty of nasdaq covered call strategies out there, none of which I'm a fan of, but others come cheaper and from much more reputable firms. They literally have typos all over their fact sheet like it was written by one of those people/bots that sends you phishing emails lol. Yikes. It seems like a low budget effort with a short track record that I simply would not trust when there are other very similar etfs out there.
What do you think is the biggest risk and worst-case scenario when investing in JEPI? Many individual investors are overconfident that JEPI is an excellent ETF that is resistant to market crashes, is safe and secure, and pays high dividends. *This post has been machine translated. The grammar may not be correct.
Besides a catastrophic event that sends all stocks down significantly, the biggest risk is that its dividends will not grow enough over time to keep pace with inflation. I see this as pretty likely. For people who are reinvesting the dividends this is not a risk but for people taking out all of the dividends as income it's a big risk. An 8% payout is widely considered in the industry to be unsustainable in the long run, and covered calls cap the upside potential, making it hard to recover from market downturns. So, I think if you're reinvesting all the dividends and have a 10+ year time horizon there is not much risk (compared to a typical stock market investment). If you're relying on this for income and taking out all the dividends it's a big risk. I hope that helps! Oh and one more since this was translated. If you're not in the U.S. or in another dollar-based country, then a weakening dollar is another risk. That could eat into your returns over time. There's no guarantee that the dollar will weaken but it could. That would be a risk.
@@FundamentalsofFinance Thank you for your kind reply. I was considering investing in JEPI, so this was very helpful. I am a Japanese individual investor, so future exchange rate fluctuations may be the biggest risk. I look forward to your future videos. (I am watching with the translation function)
What about SPDR® S&P® 500 UCITS ETF (Acc), ISIN IE000XZSV718, i find it so cheap when compares with iShares Core S&P 500 UCITS ETF acc or even Vanguard S&P 500 UCITS ETF (USD) Acc, why so? Can you make a video compare these 3 ETFs?
Sorry we mainly focus on investments available in the U.S. and if these are all 3 S&P 500 ETFs then they are likely all the same except for the expenses so I don't think that would make for a very interesting video lol
I can tell you that in the US those 3 ETFs are all basically identical. But look at their results. If they're very close except for the expense difference than that's the only difference. If some have some way worse, they might be hedging currency back to your local currency. That won't always make them do worse but over the last 10yrs it would have. It would also be a reason they might be more expensive.
@@FundamentalsofFinancethanks, i thought you lived in UK, in fact what restless me is the drastic price difference of the 3 ETF. The iShares quote at €599, the Vanguard quote at €100 and the SPDR quote for €12.84. How is it possible that such a similar product with such identical features is at such different prices?
I'll be covering this one next. We'll, there's another video we're about to release but after that will be BALI vs PAPI and maybe one or 2 other. Stay tuned. Should have it done in a week or so, maybe less.
So sweet complete and even detailed easy to understand but show me a net worth of four or five million you made off the market and I'll be impressed anybody can run off some stats show me your personal results how much are you worth there's people sitting around with their shoes off that hasn't had a shower and two days that'll work four or five million dollars That's who I want to hear That's why I want to get advice from have a good day
OK well this channel doesn't give advice and you're entitled to your opinion but let me share some valuable perspective. If you must know, I have a multimillion $ house in the hills, I'm shopping for my 3rd AMG Mercedes, and I have a lot of money in my investment accounts. But I don't share that stuff on my channel because none of it is relevant to teaching people how to invest. There's another prominent investing TH-camr who actually made his money in real estate. There's another one who made his money selling a tech company. Neither of them has a clue what they're talking about but they both have money and possessions. What is much more valuable, in my opinion, is the track record Kyle and I have built up on this channel introducing investment ideas AND THEN they worked out. Not just highlighting past successes and pretending the failures never happened. Not just implying we're good investors by showing off our possessions. We've proved it and I specifically make it a point to highlight my failures because all I want to do with this channel is teach people how to invest and if you can learn from my mistakes that's just as valuable as learning from my successes. You can use whatever criteria you like but we don't show that stuff because we feel like a CFA, a career in investing, and a proven public track record are more meaningful than what kind of car we drive or the size of our investment accounts. Those can be achieved in many ways that have nothing to do with your knowledge of investing.
Spyi drops the price of there stock every time a dividend is paid. So you are paying a tax on dividends you don’t even get. So how is that a good investment. For them, not for us
That's every mutual fund and etf. The etf price tracks very closely to the nav (actual value of all the assets the ETF has). When the etf pays out a dividend, it has fewer assets so the nav goes down, and thus so does the price. You don't lose money, the price just goes down. So, instead of 1 share at $11 you have 1 share at $10 + $1 of cash. Or, if you reinvested the dividends you'd just have more shares at a lower price per share but the same value of your investment.
@@FundamentalsofFinance You are a CFA, you should explain why focusing on yield is not useful. You seem to think that the ETFs with the highest yield are best! Ridiculous!
Wow even after my response you didn't watch the rest of the video lol. You know... like the entire section about these yields not being sustainable and the part about creating a systematic withdrawal plan instead of focusing on the yield... 🤦🏻♂️
If you want to learn more about investing from a CFA Charterholder currently in the industry, join our
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Your videos give us an excellent breakdown. Your channel should blow up!
Thank you!
Excellent comparison! Can you the same with QQQI, JEPQ and GPIQ?
Thank you! And yes, I'll do this one next. 😁
Be a good one@@FundamentalsofFinance
I second on JEPQ
Great analysis! Glad to have found your channel!
Thank you!
Wow, again another best analysis. Thank you so much for making it easy to understand.
Thank you!
Excellent video - very educational and solid analysis - thank you!
Thank you!
Great comparison! Just subscribed!
Thank you!
Excellent video and overview of the 3 covered call ETF's..... Very well done and a thorough explanation of each's positives and negatives. Thanks for your hard work and presentation of the video. I shall subscribe.... Be well and have a great Thanksgiving and holiday week.
Thank you! You too!
That was a great breakdown of the 3. Good job!
Thank you!
Fair and in-depth review wirhout crapping on cc ETFs. Nice job.
Thank you!
What are your thoughts on BALI and PAPI using the same criteria as the video?
I will add these to the list and do a video on them 😁
Just finished another video and this is the one I'll be doing next. Look out for it in the next week or so, maybe less.
Excellent video. You just earned a new sub.
Thank you!
do a review on GIAX please. thanks
I'm part of the fire movement and retired in mid 40s. I hold 30% JEPI, 30% JEPQ and 40% SCHD. I drip any dividends not spent at the end of each month and will more than likely never change a thing.
I don't know what that is but congrats! Depending on what percentage of the income you're reinvesting and the future returns of US equities you may not have to change a thing. But... you might. Best of luck!
@FundamentalsofFinance Don't know what what is, I'm assuming you mean the fire movement? It's people that invest aggressively while they are young and then once stay obtain enough growth they move everything into dividend paying ETFs and cover call options that generate enough income where they can retire early. If you're going to go that route, you want a hefty enough amount leftover each month where after paying your bills you can always drip, meaning purchasing more of the funds that are paying you, this way you are always getting a raise.
What about the 97% ROC of SPYI? That’s high. They claim on their website that they won’t be subject to NAV erosion due to appreciation. Granted, their NAV has been pretty stable so far but 97% is ROC? What am I missing? Great video btw :)
Great video please cover FDVV ❤
Great job! Can you do a matchup between SPYI vs BALI vs ISPY? Thank you again for a very informative video!
FEPI pays an excellent div. Any thoughts on this one?
My FEPI video: th-cam.com/video/QXqvFPaWt6E/w-d-xo.htmlsi=I0VxngnrmwaZTbmM
Hi, I was hoping you could compare the new QQA to both GPIQ and JEPQ.
I am attempting to steer away from covered call ETF's however I do have a position in GPIX and must say that I am pretty happy with it as it has a pretty reasonable expense ratio and good dividend without destroying your NAV. GPIX is definitely my pick between the three.
Sounds good!
What if you just put 1/3rd of your spyi shares to drip and live off income from the other 2/3rd
That's better but I still would not be confident that it would be sustainable
I feel dumb. I still don’t understand why SPYI isn’t a good investment? Would they have to cut their dividend in a down market? If not, isn’t that “downside protection?” Or are you saying that the dividend “yield” does go down as the price goes down, unlike a single company stock?
first!
Is there any place for cover call products in your view? Could an investor wisely sink a portion of an account to earn cash monthly while investing a large majority in growth assets that are untouched to compound?
The short answer is yes, but the caveat is that I fear this current craze with them is going to end very badly for a lot of people.
As part of a retirement income portfolio they can make sense when paired with other things that offer more upside potential.
Or, they can make sense as a lower-risk equity position if all of the dividends are reinvested.
But, the idea that you can take out an 8+% yield every year and maintain the value of your investment is a pipe dream. The ones with weekly distributions or super aggressive underlying stock exposure (like tsly and cony) are absolute recipes for disaster in my opinion.
So, yes, for what you're describing the more prudently managed ones (like any of these in this video) can make sense. But unfortunately I fear that many people are not using them wisely like that. If you're young, you can afford to make those mistakes and learn the hard way. If you're a retiree, it might be really hard to come back from a 30+% loss so that's what I really worry about with a lot of covered call ETFs.
Thank you very much for the insight. This is very helpful. As always, I appreciate your expertise.
I invest an unsecured line of credit into MSTY, QDTE, SPYI, XDTE. I paid off the loan in 7 months. The dividends fund have now been paid off and nothing out of my pocket. These funds have been great to build up a dividend slice of my portfolio.
I recently sold out of a fund called TUGN ....whats your take on it ?
I would avoid. There are plenty of nasdaq covered call strategies out there, none of which I'm a fan of, but others come cheaper and from much more reputable firms. They literally have typos all over their fact sheet like it was written by one of those people/bots that sends you phishing emails lol. Yikes. It seems like a low budget effort with a short track record that I simply would not trust when there are other very similar etfs out there.
What do you think is the biggest risk and worst-case scenario when investing in JEPI?
Many individual investors are overconfident that JEPI is an excellent ETF that is resistant to market crashes, is safe and secure, and pays high dividends.
*This post has been machine translated. The grammar may not be correct.
Besides a catastrophic event that sends all stocks down significantly, the biggest risk is that its dividends will not grow enough over time to keep pace with inflation. I see this as pretty likely. For people who are reinvesting the dividends this is not a risk but for people taking out all of the dividends as income it's a big risk. An 8% payout is widely considered in the industry to be unsustainable in the long run, and covered calls cap the upside potential, making it hard to recover from market downturns. So, I think if you're reinvesting all the dividends and have a 10+ year time horizon there is not much risk (compared to a typical stock market investment). If you're relying on this for income and taking out all the dividends it's a big risk. I hope that helps!
Oh and one more since this was translated. If you're not in the U.S. or in another dollar-based country, then a weakening dollar is another risk. That could eat into your returns over time. There's no guarantee that the dollar will weaken but it could. That would be a risk.
@@FundamentalsofFinance Thank you for your kind reply.
I was considering investing in JEPI, so this was very helpful.
I am a Japanese individual investor, so future exchange rate fluctuations may be the biggest risk.
I look forward to your future videos. (I am watching with the translation function)
Excellent épisode ! Just subscribe to your channel to discover more !
Thank you!
What about SPDR® S&P® 500 UCITS ETF (Acc), ISIN IE000XZSV718, i find it so cheap when compares with iShares Core S&P 500 UCITS ETF acc or even Vanguard S&P 500 UCITS ETF (USD) Acc, why so?
Can you make a video compare these 3 ETFs?
Sorry we mainly focus on investments available in the U.S. and if these are all 3 S&P 500 ETFs then they are likely all the same except for the expenses so I don't think that would make for a very interesting video lol
I can tell you that in the US those 3 ETFs are all basically identical. But look at their results. If they're very close except for the expense difference than that's the only difference. If some have some way worse, they might be hedging currency back to your local currency. That won't always make them do worse but over the last 10yrs it would have. It would also be a reason they might be more expensive.
@@FundamentalsofFinancethanks, i thought you lived in UK, in fact what restless me is the drastic price difference of the 3 ETF. The iShares quote at €599, the Vanguard quote at €100 and the SPDR quote for €12.84. How is it possible that such a similar product with such identical features is at such different prices?
BALI ???????
I'll be covering this one next. We'll, there's another video we're about to release but after that will be BALI vs PAPI and maybe one or 2 other. Stay tuned. Should have it done in a week or so, maybe less.
So sweet complete and even detailed easy to understand but show me a net worth of four or five million you made off the market and I'll be impressed anybody can run off some stats show me your personal results how much are you worth there's people sitting around with their shoes off that hasn't had a shower and two days that'll work four or five million dollars That's who I want to hear That's why I want to get advice from have a good day
OK well this channel doesn't give advice and you're entitled to your opinion but let me share some valuable perspective. If you must know, I have a multimillion $ house in the hills, I'm shopping for my 3rd AMG Mercedes, and I have a lot of money in my investment accounts. But I don't share that stuff on my channel because none of it is relevant to teaching people how to invest. There's another prominent investing TH-camr who actually made his money in real estate. There's another one who made his money selling a tech company. Neither of them has a clue what they're talking about but they both have money and possessions. What is much more valuable, in my opinion, is the track record Kyle and I have built up on this channel introducing investment ideas AND THEN they worked out. Not just highlighting past successes and pretending the failures never happened. Not just implying we're good investors by showing off our possessions. We've proved it and I specifically make it a point to highlight my failures because all I want to do with this channel is teach people how to invest and if you can learn from my mistakes that's just as valuable as learning from my successes. You can use whatever criteria you like but we don't show that stuff because we feel like a CFA, a career in investing, and a proven public track record are more meaningful than what kind of car we drive or the size of our investment accounts. Those can be achieved in many ways that have nothing to do with your knowledge of investing.
Spyi drops the price of there stock every time a dividend is paid. So you are paying a tax on dividends you don’t even get. So how is that a good investment. For them, not for us
Maybe consider learning about how a dividend or distribution is paid pal🤦♂️ every single time.
That's every mutual fund and etf. The etf price tracks very closely to the nav (actual value of all the assets the ETF has). When the etf pays out a dividend, it has fewer assets so the nav goes down, and thus so does the price. You don't lose money, the price just goes down. So, instead of 1 share at $11 you have 1 share at $10 + $1 of cash. Or, if you reinvested the dividends you'd just have more shares at a lower price per share but the same value of your investment.
Your discussion on the yield is useless, and you should explain the audience why they shouldn't focus on yield. Thumbs down!
You clearly didn't watch the whole video...
@@FundamentalsofFinance You are a CFA, you should explain why focusing on yield is not useful. You seem to think that the ETFs with the highest yield are best! Ridiculous!
Wow even after my response you didn't watch the rest of the video lol. You know... like the entire section about these yields not being sustainable and the part about creating a systematic withdrawal plan instead of focusing on the yield... 🤦🏻♂️